BLOG: Why it’s time for agents to sell overseas property again

The latest Stamp Duty hike may be the straw that breaks the camel’s back for those looking at buy-to-let (BTL) or holiday home property.

In 2016, the UK government introduced a 3% Stamp Duty surcharge on second homes, which added a significant cost to an already expensive market.

Second-home buyers were then also targeted in last year’s Budget, which allowed councils to charge double council tax for second homes.

This resulted second homeowners selling up, with Rightmove reporting that in areas with above-average second homes, they have seen four times more homes come to the market.

While in isolation this 2% increase on stamp duty may not sound drastic, based on the average asking price for a home in the UK of £371,958, buyers could now face an additional charge of more than £7,000 when buying a property.

While the Government’s aim may be to help address the housing crisis, the result is likely to persuade more British buyers to look abroad for more affordable second homes or rentals.

With several nearby countries offering lower entry costs and fewer taxes, second-home buyers and investors are certainly not short of more attractive options and outside of Europe, it’s hard to ignore the number of UK citizens moving to the UAE, especially Dubai.

The tax-free benefits of this region are well known but have now been placed in even starker relief by the additional Budget-induced financial pressures on UK second-home owners.

As a result, we’re expecting this flow of expat Brits to increase and so we are launching our products in the region next year to meet this demand.

For estate agents, the growing interest in overseas markets represents both a challenge and an opportunity.

While fewer buyers may now be looking at second homes in the UK, agents can adapt by expanding their services to include international properties.

By forming partnerships with overseas agents and offering clients access to listings in popular destinations like France, Spain, Portugal, and Italy, UK agents can tap into a new source of revenue.

Agents can also offer guidance on the nuances of purchasing abroad – such as navigating local property laws, tax implications, and residency requirements.

While the UK’s recent stamp duty increase may discourage some buyers from investing in second homes, it opens the door for greater interest in international markets.

Agents who are quick to adapt and offer expertise on overseas property markets will be best positioned to take advantage of this shift in demand.

Pia Hauch is VP Growth at Redpin, the end-to-end experts in international payments and embedded software for residential property.